KRS 304.16-030: Employee groups.

The lives of a group of individuals may be insured under a policy issued to an employer,

or to the trustees of a fund established by an employer, which employer or trustees shall

be deemed the policyholder, to insure employees of the employer for the benef it of

persons other than the employer, subject to the following requirements:

(1) The employees eligible for insurance under the policy shall be all of the employees

of the employer, or all of any class or classes thereof determined by conditions

pertaining to their employment. The policy may provide that the term "employees"

shall include the employees of one (1) or more subsidiary corporations, and the

employees, individual proprietors, and partners of one (1) or more affiliated

corporations, proprietors or partnerships if the business of the employer and of such

affiliated corporations, proprietors or partnerships is under common control through

stock ownership, contract or otherwise. The policy may provide that the term

"employees" shall include the individual proprietor or partners if the employer is an

individual proprietor or a partnership. The policy may provide that the term

"employees" shall include retired employees. No director of a corporate employer

shall be eligible for insurance under the poli cy unless such person is otherwise

eligible as a bona fide employee of the corporation by performing services other

than the usual duties of a director. No individual proprietor or partner shall be

eligible for insurance under the policy unless he is actively engaged in and devotes a

substantial part of his time to the conduct of the business of the proprietor or

partnership. A policy issued to insure the employees of a public body may provide

that the term "employees" shall include elected or appointed officials;

(2) The premium for the policy shall be paid by the policyholder, either wholly from the

employer's funds or funds contributed by him, partly from such funds and partly

from funds contributed by the insured employees, or entirely from funds contributed

by the insured employees. Except as provided in subsection (3) of this section, a

policy on which no part of the premium is to be derived from funds contributed by

the insured employees shall insure all eligible employees, except those who reject

the coverage in writing;

(3) An insurer may exclude or limit the coverage on any person for whom evidence of

individual insurability is not satisfactory to the insurer; and

(4) The amounts of insurance under the policy must be based upon some plan

precluding i ndividual selection either by the employees or by the employer or

trustees.